PLC market recovers three years sooner than expected

05 January, 2012

Despite negative factors such as the continuing economic problems in the Euro-zone, global sales of PLCs will continue to grow this year, predicts the market analyst IMS Research. It says that emerging markets such as Brazil and India, which already account for half of global PLC sales, will be the main driving force for growth, while other important PLC markets, such as Germany, France, China and the US, are still performing well.

The PLC market’s recovery from the downturn happened much sooner than suppliers had expected, IMS reports, with global revenues in 2010 reaching $8.2bn – nearly 30% higher than in 2009. The growth continued in 2011, though at a slower rate.

After the economic crisis of 2009, most PLC suppliers feared that the market would not recover to 2008 levels before 2013. However, their business was back on track three years sooner. In some developing countries, such as China and India, revenues grew even in 2009.

“Although the recovery was unexpected, it is not hard to explain,” says Alex Hong, market research analyst in IMS’ industrial factory automation group “The demand for automation products in many ongoing projects stagnated when investment funding dried up in the economic downturn. However, government economic stimulus in several countries helped to make money more available at different levels of industry.”

PLC customers – mostly builders or users of industrial machinery – had better access to funding to buy more automation products to continue with their projects. The restart of projects discontinued in 2009 and the start of new ones contributed to the high growth of the PLC market in 2010.

In the latest edition of its World Market for PLCs report, IMS reveals that there were regional differences in sales during 2011. In Europe, despite the worsening Euro-zone sovereign debt crisis, the most important market for industrial automation products – Germany – continued to grow at a healthy rate. In the Americas, large projects from some end-users and growing domestic demand helped the PLC market to expand, though the Latin American market is still underdeveloped. In Asia, the Chinese and Indian markets have performed quite well, though the Japanese market was hit by the consequences of the March earthquake.

• In a separate report, the US analyst The Freedonia Group predicts that demand for industrial controls in China will rise by 13.6% per year in the period to 2015, when it will be worth ¥259bn ($41bn). It expects demand for advanced control products to rise faster than for conventional controls and, as these products become more technologically intricate, demand for systems integration services and industrial control software will also grow rapidly. Variable speed drives will remain the largest advanced industrial controls product segment, while demand for special-purpose controls is expected to continue to outpace that for general-purpose products through to 2015, benefiting from the application-specific nature of these devices that allows them to sell at higher prices than general-purpose controls.